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Central China Securities Co., Ltd. Proxy Solicitation & Information Statement 2015

Jul 24, 2015

49885_rns_2015-07-24_07df4405-af0c-402f-ab25-89d32f0727c0.pdf

Proxy Solicitation & Information Statement

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THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your securities broker or other registered securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Central China Securities Co., Ltd. (the “ Company ”), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, securities broker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

Central China Securities Co., Ltd.

(a joint stock company incorporated in 2002 in Henan Province, the People’s Republic of China with limited liability under the Chinese corporate name “ ” and carrying on business in Hong Kong as “ ”) (Stock Code: 01375)

(1) RE-ELECTION OF DIRECTORS AND SUPERVISORS; (2) PROPOSED ALLOWANCE OF INDEPENDENT SUPERVISORS; (3) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND THE RULES OF PROCEDURES FOR THE SUPERVISORY COMMITTEE; AND (4) PROPOSED GENERAL MANDATE TO ISSUE ONSHORE AND OFFSHORE DEBT FINANCING INSTRUMENTS

Letter from the Board is set out on pages 4 to 21 of this circular.

The notice convening an extraordinary general meeting (“ EGM ”) to be held at 9:00 a.m. on Thursday, 10 September 2015 at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC, is set out on pages 26 to 33 of this circular.

The proxy form for use at the EGM is enclosed. Whether or not you are able to attend the EGM in person, you are requested to complete and return the accompanying proxy form in accordance with the instructions printed thereon. In case of holders of H Shares, the proxy forms shall be lodged with the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong; and in case of holders of Domestic Shares, the proxy forms shall be lodged at the head office of the Company in the PRC as soon as possible, but in any event, not less than 24 hours before the time scheduled for holding the relevant meetings (or any adjournment thereof) as soon as practicable. Completion and delivery of the proxy forms will not preclude you from attending and voting in person at the relevant meetings or any adjournment if you so desire.

27 July 2015

CONTENTS

Page
DEFINITIONS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		 1
**LETTER ** FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(1) Re-election of Directors and Supervisors . . . . . . . . . . . . . . . . . . . . . . . . . 5
(2) Proposed Allowance of Independent Supervisors
. . . . . . . . . . . . . . . . . . .		 14
(3) Proposed Amendments to the Articles of Association and
the Rules of Procedures for the Supervisory Committee. . . . . . . . . . . . . 15
(4) Proposed General Mandate to Issue Onshore and Offshore Debt Financing
Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(5) General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
APPENDIX
–
Proposed Amendments to the Articles of Association and
the Rules of Procedures for the Supervisory Committee . . . . . . 22
**NOTICE ** OF EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

– i –

DEFINITIONS

In this circular, unless the context requires otherwise, the following terms shall have the following meanings:

  • “Anyang Iron & Steel Group”

Anyang Iron & Steel Group Co., Ltd. (安陽鋼鐵集團有限 責任公司), which holds 7.139% equity interest in the Company

  • “Articles of Association”

  • the Articles of Association of the Company as amended made from time to time

  • “Ashmore-CCSC Fund Management”

  • Ashmore-CCSC Fund Management Company Limited (中原英石基金管理有限公司), a subsidiary in which the Company holds 51% equity interest

  • “Board” the board of Directors of the Company

  • “Bohai Fund Management”

  • Bohai Industrial Investment Fund Management Co., Ltd. (渤海產業投資基金管理有限公司), which holds on behalf of Bohai Industrial Investment Fund 23.104% equity interest in the Company

  • “Central China Futures” Central China Futures Co., Ltd. (中原期貨有限公司), in which the Company holds 51.36% equity interest

  • “Company”

  • Central China Securities Co., Ltd. (中原証券股份有限公 司) (carrying on business in Hong Kong as “中州証券”), a joint stock company incorporated on 8 November 2002 in Henan Province, the PRC with limited liability, the H Shares of which are listed on the Main Board of the Stock Exchange

  • “connected person” has the same meaning as ascribed to this term under the Listing Rules

  • “controlling shareholder”

  • has the same meaning as ascribed to this term under the Listing Rules

  • “CSRC”

  • China Securities Regulatory Commission

  • “Directors”

the directors of the Company, including the independent non-executive directors

– 1 –

DEFINITIONS

  • “Domestic Share(s)”

  • “EGM”

  • “Group”

  • “H Share(s)”

  • “Henan Investment Group”

  • “Henan Securities”

  • “Hong Kong”

  • “Listing Rules”

  • “Onshore and Offshore Debt Financing Instrument(s)”

  • “PRC”

“RMB”

  • “Rules of Procedures for the Supervisory Committee”

  • issued ordinary share(s) in the share capital of the Company, with a nominal value of RMB1.00 each, which are subscribed for or credited as fully paid in RMB

  • the extraordinary general meeting of the Company to be held on 10 September 2015

  • the Company and its subsidiaries

  • the overseas listed foreign ordinary share(s) in the share capital of the Company, with a nominal value of RMB1.00 each, which are listed on the Main Board of the Stock Exchange (stock code: 01375)

  • Henan Investment Group Co., Ltd. (河南投資集團有限公 司), the controlling shareholder of the Company which holds approximately 33.096% of the issued share capital of the Company

  • Henan Securities Co., Ltd. (河南證券有限責任公司), whose securities business-related assets were acquired by the Company

  • the Hong Kong Special Administrative Region of the PRC

  • the Rules Governing the Listing of Securities on the Stock Exchange

  • the proposed issuance of onshore and offshore debt financing instrument(s) by the Company for Shareholders’ approval at the EGM, details of which are set out under the section “Letter From the Board – (4) Proposed General Mandate to Issue Onshore and Offshore Debt Financing Instruments” of this circular

  • The People’s Republic of China which, for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

  • Renminbi, the lawful currency of the PRC

  • the Rules of Procedures for the Supervisory Committee of the Company as amended from time to time

– 2 –

DEFINITIONS

“SFO” the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong)
“Share(s)” Domestic Shares and H Shares
“Shareholder(s)” the shareholder(s) of the Company
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Supervisors” the supervisors of the Company
“Supervisory Committee” the supervisory committee of the Company
“US dollar” US dollar, the lawful currency of the United States of
America
“%” per cent

– 3 –

LETTER FROM THE BOARD

Central China Securities Co., Ltd.

(a joint stock company incorporated in 2002 in Henan Province, the People’s Republic of China with limited liability under the Chinese corporate name “ ” and carrying on business in Hong Kong as “ ”) (Stock Code: 01375)

Executive Directors: Mr. JIAN Mingjun (Chairman) Mr. ZHOU Xiaoquan

Non-executive Directors: Mr. LI Xingjia Mr. ZHANG Qiang Mr. ZHU Jie Mr. WANG Lixin Mr. YU Zeyang

Independent Non-executive Directors: Mr. ZHU Shanli Mr. YUAN Dejun Mr. YUEN Chi Wai Mr. NING Jincheng

Registered Address in the PRC: No. 10 Shangwu Waihuan Road Zhengdong New District Zhengzhou, Henan Province China

Headquarters/Principal Place of Business in the PRC: No. 10 Shangwu Waihuan Road Zhengdong New District Zhengzhou, Henan Province China

Principal Place of Business in Hong Kong: 18/F, Tesbury Centre 28 Queen’s Road East Wanchai, Hong Kong

27 July 2015

To the Shareholders

(1) RE-ELECTION OF DIRECTORS AND SUPERVISORS;

(2) PROPOSED ALLOWANCE OF INDEPENDENT SUPERVISORS; (3) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND THE RULES OF PROCEDURES FOR THE SUPERVISORY COMMITTEE; AND (4) PROPOSED GENERAL MANDATE TO ISSUE ONSHORE AND OFFSHORE DEBT FINANCING INSTRUMENTS

INTRODUCTION

Reference is made to the announcement of the Company dated 22 July 2015 in relation to (i) re-election of Directors and Supervisors; (ii) proposed allowance of independent Supervisors; and (iii) proposed amendments to the Articles of Association and the Rules of Procedures for the Supervisory Committee. The purpose of this circular is to provide you with details of the above matters and the proposed general mandate to issue Onshore and Offshore Debt Financing Instruments to enable the Shareholders to make an informed decision on whether to vote for or against or abstain from voting on the proposed resolution(s) at the EGM.

– 4 –

LETTER FROM THE BOARD

(1) RE-ELECTION OF DIRECTORS AND SUPERVISORS

The terms of office of the current Fourth Board and Fourth Supervisory Committee will expire, and the Company proposes to re-elect its Directors and Supervisors to the Fifth Board and the Fifth Supervisory Committee, respectively. The appointment of the proposed Directors and Supervisors is subject to the approval by the Shareholders at the EGM by way of ordinary resolutions and the approval of the relevant governmental authorities of the PRC. According to the relevant requirements under the PRC Company Law, the current Directors and Supervisors should hold their respective office until the formation of the Fifth Board and the Fifth Supervisory Committee.

Nomination of Directors

The Board has nominated the following persons to be the Directors of the Fifth Board:

Directors:

Mr. Jian Mingjun Mr. Zhou Xiaoquan

Mr. Yuan Shunxing

Mr. Wang Lixin

Mr. Zhang Qiang

Mr. Zhang Xiaoqi Mr. Yu Zeyang

Independent non-executive Directors:

Mr. Zhu Shanli

Mr. Yuan Dejun

Mr. Yuen Chi Wai

Mr. Ning Jincheng

Details of the above proposed Directors are set out below:

Mr. Jian Mingjun

Mr. Jian Mingjun, aged 52, has been the chairman of the Board of the Company and the executive Director since August 2012, and has been the secretary of the party committee and a director of Ashmore-CCSC Fund Management since November 2014. Mr. Jian joined the Company in December 2007 as the deputy party secretary of the Company, and served as our executive Director and president from October 2008 to August 2012. Before he joined the Company, he used to be the vice chief officer of the planning office of the Company during the period from October 2000 to October 2002. Mr. Jian has almost 30 years’ experience in finance industry and served in various positions in governmental departments and institutions. Mr. Jian served in Comprehensive Plan Office of Ministry of Finance of the PRC from August 1985 to January 1987. Mr. Jian then served in Finance Department of Henan Province from January 1987 to May 1997. Mr. Jian served as the standing vice president of ASIA (group) Accounting

– 5 –

LETTER FROM THE BOARD

Firm from May 1997 to June 2000. Mr. Jian was the director of General Office of Finance Department of Henan Province during the period from June 2000 to October 2000 and the period from October 2002 to December 2002. Mr. Jian was the chairman of State-owned Enterprises Supervisory Committee of the Henan Government from December 2002 to December 2007.

Mr. Jian is currently a standing committee member of Henan Provincial People’s Congress, a member of Henan Provincial People’s Congress, Financial and Economic Affairs Committee of Henan Provincial People’s Congress and the Investment Bank Committee under Securities Association of China, and the president of the Securities and Futures Association of Henan. Mr. Jian was granted the honourous title of model worker of Henan by Henan Government in April 2014 and was awarded as “People of 2013 – Henan Economic” in January 2014. He was also chosen as the “Most Influential Enterprise Leader in Central China” for five consecutive years from 2009 by mainstream media in Henan.

Mr. Jian graduated from Zhongnan University of Economics and Law (formerly known as Zhongnan University of Finance and Economics) with a bachelor degree of economics majoring in public finance in July 1985. Mr. Jian was admitted exceptionally by Research Institute for Fiscal Science, Ministry of Finance to study public finance in September 1997 and obtained a doctoral degree of economics in July 2000. Mr. Jian has obtained senior accountant qualification granted by the Henan Government in July 2000, a Provincial Excellent Expert granted by Communist Party of China Henan Province Committee and the Henan Government in May 2002 and a State Council Expert for Special Allowance granted by the State Council of the PRC in April 2015.

Mr. Zhou Xiaoquan

Mr. Zhou Xiaoquan, aged 42, has been an executive Director and the president of the Company since August 2012. Mr. Zhou joined the Company in March 2009 and served as the chairman of Supervisory Committee and the secretary of the party committee for disciplinary inspection of the Company for the period from March 2009 to August 2012. Mr. Zhou was a director of Ashmore-CCSC Fund Management from January 2013 to October 2014. Mr. Zhou has been a chairman of Ashmore-CCSC Fund Management since October 2014. Mr. Zhou is experienced in finance industry. Before he joined the Company, Mr. Zhou worked in the credit and loan department and corporate department of China Construction Bank Corporation respectively from July 1999 to November 2002. Mr. Zhou worked in the supervisory working department of Communist Party of China Central Financial Work Committee (which subsequently transformed into China Banking Regulatory Commission) from November 2002 to August 2003. Mr. Zhou then worked consecutively in the supervisory committee of National Financial Institutions department of the CSRC, Institution Supervision Department of the CSRC and Securities Companies Risk Management Office of the CSRC from August 2003 to February 2009. Mr. Zhou is currently a deputy director of Securities Companies Compliance Committee of the Securities Association of China.

– 6 –

LETTER FROM THE BOARD

Mr. Zhou graduated from Wuhan Polytechnic University (formerly known as Wuhan Engineering College) with a bachelor degree of engineering majoring in food engineering in June 1995; he obtained a master degree of economics majoring in industrial economics from Zhongnan University of Economics and Law in June 1999 and a doctoral degree of economics majoring in industrial economics from Zhongnan University of Economics and Law in June 2003. Mr. Zhou is awarded as a Provincial Excellent Expert by Communist Party of China Henan Province Committee and the Henan Government in June 2011 and as a State Council Expert for Special Allowance by the State Council of the PRC in February 2013.

Mr. Yuan Shunxing

Mr. Yuan Shunxing, aged 48. Mr. Yuan served as a credit officer at the Technical Improvement Office of the Department of Finance of Henan Province from July 1991 to January 1992. He served as a credit officer, deputy supervisor of the credit department, supervisor of the investment department, assistant to the general manager and deputy general manager of the Henan Economic and Technology Development Co., Ltd from January 1992 to October 2007. He later served as temporary person in charge and plan director of the asset management division seven of Henan Investment Group from October 2007 to June 2010, and has served as deputy general manager of Henan Investment Group since June 2010. Mr. Yuan was the non-executive Director of the Company from November 2002 to June 2008.

Mr. Yuan graduated from Zhengzhou University with a bachelor degree in engineering majoring in computer science in June 1988. He later received a certificate for an advanced course in senior management leadership enhancement from Tsinghua University in December 2013.

Mr. Wang Lixin

Mr. Wang Lixin, aged 48, has been a non-executive Director of the Company since September 2014. Mr. Wang has been the deputy general manager of Bohai Fund Management since June 2013. Mr. Wang held the positions of vice president of Beijing Representative Office at BOC International Holdings Limited, executive director and managing director of BOCI Securities Limited, and managing director of BOC International Holdings Limited between June 1998 and June 2013.

Mr. Wang graduated from Peking University with a bachelor degree in economics majoring in economics in July 1986 and obtained a master degree in economics from Peking University in January 1989.

– 7 –

LETTER FROM THE BOARD

Mr. Zhang Qiang

Mr. Zhang Qiang, aged 51, has been a non-executive Director of the Company since August 2012. Mr. Zhang served as the deputy general manager of medium factory of Anyang Iron & Steel Co., Ltd. (the shares of which are listed on Shanghai Stock Exchange, stock code: 600569) from August 1983 to March 2002, and the deputy general manager of the third steel mill of Anyang Iron & Steel Co., Ltd. from March 2002 to August 2005. Mr. Zhang worked in Anyang Iron & Steel Group as the deputy director of the planning department from August 2005 to April 2008 and has been the deputy division director of the strategy investment department of Anyang Iron & Steel Co., Ltd. since April 2008.

Mr. Zhang graduated from Northeastern University (formerly known as Northeastern Engineering College) majoring in pressurized metal process in July 1983. Mr. Zhang obtained the professional qualification of senior engineer from the Henan Government in December 1996.

Mr. Zhang Xiaoqi

Mr. Zhang Xiaoqi, aged 29, has been the deputy general manager of Beijing Maoyuan Capital Investment Management Co., Ltd since March 2014. Mr. Zhang was a researcher at the Shenzhen Stock Exchange Securities Information Co., Ltd. from December 2009 to August 2012, and served as a project manager of Beijing Maoyuan Capital Investment Management Co., Ltd. from September 2012 to February 2014.

Mr. Zhang graduated from the Business School of University of Toronto, receiving a bachelor degree in commerce and majoring in commerce and finance and accounting (commerce and finance).

Mr. Yu Zeyang

Mr. Yu Zeyang, aged 45, has been a non-executive Director of the Company since November 2014. Mr. Yu has been the head of Capital Operation Department of Pingmei Shenma Energy, general manager of Henan Zhongping Investment Co., Ltd., supervisor of Pingdingshan Tianan Coal Mining Co., Ltd. (the shares of which are listed on the Shanghai Stock Exchange, stock code: 601666) and director of Henan Xindaxin Materials Co., Ltd. (the shares of which are listed on the Shenzhen Stock Exchange, stock code: 300080). During February 2005 to January 2011, Mr. Yu served as deputy head of secretariat of the board of directors of Pingdingshan Coal (Group) Co., Ltd., deputy chief of office of the board of directors of and deputy head of secretariat of general office of Pingdingshan Coal (Group) Co., Ltd., and head of secretariat of general office of China Pingmei Shenma Energy & Chemical Group Co., Ltd.

Mr. Yu graduated from Henan Polytechnic University (formerly known as Jiaozuo Mining Institute) with a bachelor degree in mining engineering in July 1992. He is currently a senior accountant.

– 8 –

LETTER FROM THE BOARD

Mr. Zhu Shanli

Mr. Zhu Shanli, aged 61, has been an independent non-executive Director of the Company since August 2012. Mr. Zhu has been working in Guanghua School of Management, Peking University as the deputy professor and professor consecutively since September 1992. He used to serve as the director of department of economics and management and the assistant dean of Guanghua School of Management, and he is currently the director of academy committee, professor and doctor tutor of Guanghua School of Management.

Mr. Zhu obtained his bachelor degree of economics majoring in political economics from Peking University in January 1982 and the master degree of economics majoring in foreign history of economic thoughts from Peking University in July 1984. Mr. Zhu obtained a doctoral degree majoring in economics from Peking University in July 1992. Mr. Zhu has been a State Council Expert for Special Allowance granted by the State Council of the PRC since April 1999.

Mr. Yuan Dejun

Mr. Yuan Dejun, aged 64, has been an independent non-executive Director of the Company since August 2012. Mr. Yuan taught in Harbin Finance University (formerly known as Harbin Finance Institution) as an associate professor from September 1982 to January 1995, and taught in Tianjin University of Finance & Economics as a professor from February 1995 to October 2000. Mr. Yuan used to be the senior economist of China Galaxy Securities Co., Ltd. (the shares of which are listed on the Stock Exchange, stock code: 6881) from November 2000 to January 2012. Mr. Yuan has been an independent non-executive director of Ningxia Qinglong Pipes Industry Co., Ltd. (the shares of which are listed on Shenzhen Stock Exchange, stock code: 002457) since January 2014.

Mr. Yuan obtained his bachelor degree majoring in finance from Jilin University of Finance and Economics (formerly known as Jilin College of Finance and Economics) in July 1982. He studied in Japan’s Nomura Securities Companies and Nomura Research Institute and obtained an on-job graduation certificate in November 1985. Mr. Yuan obtained doctoral degree of economics majoring in applied economics from Graduate School of Chinese Academy of Social Sciences in June 2000.

Mr. Yuen Chi Wai

Mr. Yuen Chi Wai, aged 39, has been an independent non-executive Director of the Company since June 2014. Mr. Yuen is experienced in auditing, corporate internal control, and financial and risk management. Mr. Yuen used to work as an auditor in Charles Mar Fan & Co. from February 1998 to April 2000, and an auditor in Arthur Andersen from May 2000 to June 2002. Mr. Yuen worked in PricewaterhouseCoopers (Hong Kong) from July 2002 to August 2005 and served as an auditor; and worked in Beijing branch and Shenzhen branch of PricewaterhouseCoopers from August 2005 to December 2009 and served as an auditor. Mr. Yuen served as the chief financial officer and company secretary of Bolina Holding Co., Ltd. (the shares of which are listed on the Stock Exchange, stock code: 1190) from May 2011 to May 2015 and has been its assistant executive since May 2015.

– 9 –

LETTER FROM THE BOARD

Mr. Yuen graduated from the University of New South Wales with a bachelor’s degree majoring in commerce in April 1998. He was admitted as a fellow member of the Hong Kong Institute of Certified Public Accountants in March 2013 and a fellow member of Certified Public Accountants of Australia in July 2014.

Mr. Ning Jincheng

Mr. Ning Jincheng, aged 59, has been an independent non-executive Director of the Company since March 2015. Mr. Ning is currently a professor of the law faculty, doctoral tutor and an university researcher of Zhengzhou University. Mr. Ning has worked in the areas of legal education and research and administrative management and accumulated extensive experiences in legal sector after graduation from Zhengzhou University with a bachelor degree in economics in June 1982. Mr. Ning also obtained a doctoral degree in law (civil law and business law) from Macau University of Science and Technology in January 2005 and completed the training course for senior management of listed companies organized by the Shenzhen Stock Exchange in August 2012. Mr. Ning has been an independent director of Zhengzhou Coal Industry and Electric Power Co., Ltd. (the shares of which are listed on the Shenzhen Stock Exchange, stock code: 600121) since June 2014.

Matters that need to be brought to the attention of the Shareholders

Saved as disclosed above, each of the proposed Directors confirmed that (i) he does not hold any position of the Group nor any other directorship in other listed companies for the past three years; (ii) he does not have any relationship with any other Directors, Supervisors, senior management, substantial or controlling shareholders of the Company; and (iii) he does not have any interests in the Shares of the Company within the meaning of Part XV of the SFO.

Save as disclosed above, in relation to the appointment of the proposed Directors, there is no information which is discloseable nor is/was he/she involved in any of the matters required to be disclosed pursuant to any of the requirements of the provisions under paragraphs 13.51(2)(h) to 13.51(2)(v) of the Listing Rules, and there are no other matters that need to be bought to the attention of the Shareholders and the Stock Exchange.

The appointment of the proposed Directors shall take effect upon the approval by the Shareholders at the EGM by way of ordinary resolutions and the approval of the relevant governmental authorities of the PRC. The term of office of the Fifth Board shall commence from the date of EGM or approval of the relevant governmental authorities of the PRC (whichever is later) for a term of three years. The remunerations of the internal Directors (i.e. the executive Directors) shall be determined according to the resolutions of the previous general meetings of the Company on remuneration of the Directors and such factors as the Company’s operating results, job responsibilities, work performance and market environment. The remunerations of the external Directors (i.e. the non-executive Directors) shall be proposed by the Board’s Remuneration and Nomination Committee according to the industry and market conditions, which proposal has been implemented after approval by the previous general meetings of the Company.

– 10 –

LETTER FROM THE BOARD

Nomination of Supervisors

The Supervisory Committee has nominated the following persons to be the Supervisors (non-employee representative Supervisors) of the Fifth Supervisory Committee:

Supervisors: Mr. Lu Zhili Mr. Wang Jinchang Mr. Yan Changkuan Mr. Cui Yuanfeng

Independent Supervisors: Ms. Xiang Siying Ms. Li Jieying

Details of the above proposed Supervisors are set out below:

Mr. Lu Zhili

Mr. Lu Zhili, aged 48, has been the standing vice president of the Company since March 2013. Mr. Lu joined the Company since its incorporation in November 2002 and served as the vice president from November 2002 to March 2013. Mr. Lu has been the director of Central China Futures and Ashmore-CCSC Fund Management since March 2008 and January 2013 respectively. Before joining the Company, Mr. Lu worked consecutively as the manager of the securities issuance department, assistant to general manager and chairman of the research department of Henan Securities from September 1992 to November 2002.

Mr. Lu obtained a bachelor degree majoring in physics from Henan Normal University in July 1989. He obtained a master degree in economics majoring in national economics from Shanghai University of Finance and Economics in February 2001. The Henan government granted the qualification of senior economist to Mr. Lu in March 2002.

Mr. Wang Jinchang

Mr. Wang Jinchang, aged 41. He was an employee of the investment department and manager of the finance department of the Zhengzhou Trust Investment Company from July 1997 to June 2001; the senior business manager of the asset management division one and the developmental planning department of Henan Province Construction Investment Company from June 2001 to August 2004; the chief accountant of Henan Xuchang Xinlong Mining Co., Ltd. from August 2004 to February 2006; the supervisor of the developmental planning department of Henan Province Construction Investment Company from February 2006 to October 2007; the deputy supervisor of the developmental planning department of Henan Investment Group from October 2007 to June 2008; the deputy general manager and financial controller of Henan Ancai Hi-Tech Co., Ltd. (the shares of which are listed on the Shanghai Stock Exchange, stock code: 600207) from June 2008 to April 2010; and the director of general manager office of Henan Investment Group from April 2010 to July 2010. Since July 2010, he has been the supervisor of the department of disciplinary supervision of Henan Investment Group.

– 11 –

LETTER FROM THE BOARD

Mr. Wang graduated from the Henan University of Economics and Law (formerly known as Henan College of Finance and Economics), receiving a bachelor degree majoring in finance in June 1997. He graduated from Wuhan University, receiving a master degree majoring in finance in December 2005. He graduated from Central South University, majoring in management science and engineering in January 2014, and received a doctoral degree in management science in June 2014. Mr. Wang was granted the qualification of senior accountant by the government of Henan province in November 2005.

Mr. Yan Changkuan

Mr. Yan Changkuan, aged 51, has been a shareholder representative Supervisor of the Company since June 2006. Mr. Yan served as the assistant to the director of financial department and the deputy director of financial department of Anyang Iron & Steel Group from March 1996 to March 2002. He was the secretary to the board of directors and the head of the securities department of Anyang Iron & Steel Co., Ltd. (the shares of which are listed on the Shanghai Stock Exchange, stock code: 600569) from April 2002 to April 2006. Mr. Yan served as the director of the financial department of Anyang Iron & Steel Group from May 2006 to August 2011 and a director of Anyang Iron & Steel Co., Ltd. from November 2009 to November 2012. Mr. Yan was the director of the financial department and the general accountant of Anyang Iron & Steel Group from August 2011 to December 2013. Mr. Yan has served as the general accountant of Anyang Iron & Steel Group since December 2013.

Mr. Yan graduated from Henan Industrial School (formerly known as Henan Metallurgy Industrial School) majoring in industrial accounting in July 1982. Mr. Yan graduated from Henan Provincial Party School majoring in economic management in December 1996. Mr. Yan obtained senior accountant qualification and senior accountant of professor class qualification granted by the Henan Government in December 1997 and September 2012, respectively.

Mr. Cui Yuanfeng

Mr. Cui Yuanfeng, aged 38. He worked at Zhongnan University of Economics and Law as an associate professor from July 2004 to December 2009, and was engaged in the education and research of economics. He worked at the People’s Government of Tangyin Country from January 2010 to August 2013 as deputy county head and was engaged in party politics. Since September 2013, he has worked at Anyang Economic Development Group Co., Ltd. as general manager and is engaged in economic related works.

Mr. Cui graduated from Zhengzhou University with a bachelor degree majoring in international trade in June 1999.

– 12 –

LETTER FROM THE BOARD

Ms. Xiang Siying

Ms. Xiang Siying, aged 52, is an executive director of CDH Investments. Ms. Xiang has extensive business experience in the fields of finance and investment, and has been an executive director of CDH Investments since 2010. Ms. Xiang has been the executive general manager of the direct investment division and the investment banking division of China International Finance Corporation from 2004 to 2010. She was an investment officer in Washington D.C. in the East Asia and Pacific Branch and Global Manufacturing and Consumer Service Branch of International Finance Corporation. Ms. Xiang served as the officer of the general office of the rural management and administration and the foreign economic office in the Ministry of Agriculture of the PRC from 1988 to 1991.

Ms. Xiang graduated from Beijing Agricultural University (now known as China Agricultural University) with a bachelor degree in agriculture in 1986. She graduated from Zhongnan University of Finance and Economics (now known as Zhongnan University of Economics and Law) as a postgraduate majoring in finance in 1988. She obtained a master degree in economics from the Research Institute for Fiscal Science, Ministry of Finance of China in 1989 and received a master degree in business administration from London Business School in 1999.

Ms. Li Jieying

Ms. Li Jieying, aged 67, has served in senior positions at the Hong Kong Futures Exchange, Stock Exchange and Hong Kong Exchanges and Clearing Limited, and has accumulated over 20 years of experience in the fields of derivative products and the operation, supervision and risk management of securities markets. Ms. Li is currently the chairman of Virtus Foundation Limited. She is an independent non-executive director of China BlueChemical Ltd. (the shares of which are listed on the Stock Exchange, stock code: 3983). She is an independent non-executive director of Tianjin Capital Environmental Protection Group Company Limited (the H shares of which are listed on the Stock Exchange, stock code: 1065; and the A shares of which are listed on the Shanghai Stock Exchange, stock code: 600874). She is also an independent non-executive director of Century Iron Mines Corporation (the shares of which are listed on the Toronto Stock Exchange, stock code: FER).

Ms. Li graduated from the City of London Polytechnic (now known as the London Metropolitan University) with a bachelor degree majoring in accounting in 1979. She received a master degree in financial engineering from the City University of Hong Kong in 1998. Ms. Li is currently a fellow of the Institute of Chartered Accountants in England and Wales.

Matters that need to be brought to the attention of the Shareholders

Saved as disclosed above, each of the proposed Supervisors confirmed that (i) he/she does not hold any position of the Group nor any other directorship in other listed companies for the past three years; (ii) he/she does not have any relationship with any other Directors, Supervisors, senior management, substantial or controlling shareholders of the Company; and (iii) he/she does not have any interests in the Shares of the Company within the meaning of Part XV of the SFO.

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LETTER FROM THE BOARD

Save as disclosed above, in relation to the appointment of the proposed Supervisors, there is no information which is discloseable nor is/was he/she involved in any of the matters required to be disclosed pursuant to any of the requirements of the provisions under paragraphs 13.51(2)(h) to 13.51(2)(v) of the Listing Rules, and there are no other matters that need to be bought to the attention of the Shareholders and the Stock Exchange.

According to the Articles of Association, the employee representative Supervisors shall be elected and appointed by the employee representatives general meeting of the Company, the appointment of whom is not subject to the Shareholders’ approval.

The appointment of the proposed Supervisors shall take effect upon the approval by the Shareholders at the EGM by way of ordinary resolutions and the approval of the relevant governmental authorities of the PRC. The term of office of the Fifth Supervisory Committee shall commence from the date of EGM or approval of the relevant governmental authorities of the PRC (whichever is later) for a term of three years. The remunerations of the internal Supervisors (i.e. the chairman of the Supervisory Committee and the employee representative Supervisors) shall be determined according to the resolutions of the previous general meetings of the Company on remuneration of the Supervisors and such factors as the Company’s operating results, job responsibilities, work performance and market environment. The remunerations of the external Supervisors (i.e. the Supervisors excluding the internal Supervisors) shall be proposed by the Supervisory Committee according to the industry and market conditions, which proposal shall be implemented after approval by the previous general meetings of the Company.

Retirement of Directors and Supervisors

Upon the formation of the Fifth Board and the Fifth Supervisory Committee, Mr. Li Xingjia, Mr. Zhu Jie will retire from the position of Directors, and Mr. Zhou Jianzhong, Ms. Wang Rui and Mr. Ji Guangyuan will retire from the position of Supervisors. The above retiring Directors and Supervisors have confirmed that they have no disagreement with the Board and the Supervisory Committee and there is no matter with respect to their retirement that needs to be brought to the attention of the Shareholders.

The Board would like to take this opportunity to express its appreciation for the valuable contribution of Mr. Li Xingjia, Mr. Zhu Jie, Mr. Zhou Jianzhong, Ms. Wang Rui and Mr. Ji Guangyuan to the Company during their respective terms of service.

(2) PROPOSED ALLOWANCE OF INDEPENDENT SUPERVISORS

The appointment of the proposed independent Supervisors is expected to take effect upon approval by the Shareholders at the EGM and the approval of the relevant governmental authorities of the PRC, and the Supervisory Committee proposes the allowance of the independent Supervisors of the Fifth Supervisory Committee to be RMB100,000 (before taxation) per person per year and to be paid monthly. The above proposal is subject to the approval by the Shareholders at the EGM by way of ordinary resolutions.

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LETTER FROM THE BOARD

(3) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND THE RULES OF PROCEDURES FOR THE SUPERVISORY COMMITTEE

Pursuant to the relevant requirement of establishment of independent supervisor system in overseas listed companies under “Opinion on Further Promoting Regulation of Operation and In-depth Reform of Overseas Listed Companies” (《關於進一步促進境外上市公司規範運 作和深化改革的意見》) and according to the actual situation of the Company, the Board and the Supervisory Committee propose to amend the existing Articles of Association and the Rules of Procedures for the Supervisory Committee, respectively.

Proposed amendments to the Articles of Association and the Rules of Procedures for the Supervisory Committee are set out in the Appendix to this circular.

The English versions of the Articles of Association and the Rules of Procedures for the Supervisory Committee are unofficial translations of the Chinese versions. In the event of any inconsistency, the Chinese versions shall prevail.

The proposed amendments to the Articles of Association are subject to the approval by the Shareholders at the EGM by way of special resolutions and the approval of the relevant governmental authorities of the PRC. The proposed amendments to the Rules of Procedures for the Supervisory Committee are subject to the approval by the Shareholders at the EGM by way of ordinary resolutions

(4) PROPOSED GENERAL MANDATE TO ISSUE ONSHORE AND OFFSHORE DEBT FINANCING INSTRUMENTS

In order to facilitate transformation and innovation, expansion in capital investment and capital intermediate business, and coupled with the current liability, leveraging and future actual operation needs of the Company, the Company proposed to implement a stable debt finance strategy by drawing on debt financing methods commonly used in the industry in accordance with various laws and regulations such as the Securities Law of the PRC, the Company Law of the PRC, the Regulations on Supervision and Management of Securities Companies, the Administrative Measures for the Issuance and Trading of Corporate Bonds and the Provisions on the Administration of Subordinated Debts of Securities Companies, thereby optimizing its capital structure and maximizing the interest of the Shareholders.

Based on the above reasons, the Company proposed the resolutions in relation to the issuance of Onshore and Offshore Debt Financing Instruments at the EGM for approval. Provided that the Company complied with the Administrative Measures for the Risk Control Indicators of Securities Companies in the PRC and the internal prudential risk indicators of the Company, the Company can issue various domestic debt financing instruments on an one-off or multiple issuances or multi-tranche issuances bases, either openly or privately, these debt financing instruments include, but not limited to, corporate bonds, short-term corporate bonds, subordinated bonds (including perpetual subordinated bonds), asset-backed securities (notes), income receipts and other domestic debt financing instruments to be issued by the Company

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LETTER FROM THE BOARD

as approved or filed with CSRC, Securities Association of China, stock exchanges and other relevant authorities in accordance with relevant regulation; and offshore debt financing instruments, on an one-off or multiple issuances or multi-tranche issuances bases, such as US dollar, Euro and other foreign currency denominated corporate bonds and offshore RMBdenominated corporate bonds, medium term note programme, foreign currency notes and commercial papers, except for debt financing instruments (such as short-term notes) which are subject to the approval of the Board or the general meeting in accordance with national regulations and policies of the Company (the above Onshore and Offshore Debt Financing Instruments shall not contain any provision for conversion into shares).

Proposal for the Proposed Issuance of Onshore and Offshore Debt Financing Instruments

The specific details on the proposal for the issuance of Onshore and Offshore Debt Financing Instruments are as follows:

  • (i) Size:

The total size of the Onshore and Offshore Debt Financing Instruments shall not exceed 300% of the net asset value in the latest financial statements (inclusive of 300%, the size of issuance is calculated based on the outstanding amount denominated in RMB upon issuance; in the case of an instrument denominated in a foreign currency, based on the central parity rate announced by the People’s Bank of China on the date of each issuance or each tranche issuance), subject to relevant laws and regulations in respect of issuance limit, can be issued on an one-off or multiple issuances or multi-tranche issuances bases.

(ii) Types:

The specific types and priorities for repayment of the Onshore and Offshore Debt Financing Instruments shall be determined according to relevant regulations and the market condition at the time of issuance.

(iii) Terms:

The term of Onshore and Offshore Debt Financing Instruments shall not exceed 10 years (inclusive) with a single term or hybrid type with multiple terms.

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LETTER FROM THE BOARD

  • (iv) Interest rate:

The interest rate of the issuance and its method of calculation and payment method thereof shall be determined according to the market condition at the time of issuance and relevant regulations.

  • (v) Issue price:

The issue price shall be determined according to the market condition at each issuance and relevant laws and regulations.

  • (vi) Security and other credit enhancement arrangement:

Security and other credit enhancement arrangements shall be determined according to relevant laws and regulations.

  • (vii) Use of proceeds:

After deducting relevant expenses for the issuance, all of the proceeds will be used to supplement the working capital of the Company, fulfill the operation needs and support the business expansion, or used for the adjustment on liability structure of the Company, the supplement of the liquidity of the Company and project investment and/or construction of fixed assets according to laws.

  • (viii) Issuer(s):

The Company or the domestic and overseas wholly-owned subsidiary(ies) of the Company will be serve as the issuer(s).

  • (ix) Method of issuance:

Shall be under custody and issue in accordance with the approval or filing of relevant authorities.

  • (x) Targets of issue and the placement arrangements to the Shareholders:

The targets of issue shall be investors which meet the conditions for subscription in accordance with relevant laws and regulations. Placement to the Shareholders of the Company can be conducted in accordance with laws.

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LETTER FROM THE BOARD

  • (xi) Safeguard measures for debt repayment:

During the term of Onshore and Offshore Debt Financing Instruments, the Company can increase the proportion of allocations of discretionary surplus reserve and general risk reserve. When there is an anticipated or actual failure to repay the principal and interests of the Onshore and Offshore Debt Financing Instruments when they become due, at least the following measures shall be taken by the Company:

  • (1) not to distribute dividend to the Shareholders;

  • (2) to suspend implementation of any capital expenditure projects such as material external investments, acquisitions and mergers, etc.;

  • (3) to reduce or cease the payment of salary and bonus of the Directors and senior management of the Company;

  • (4) to forbid the job transfers of principal persons in charge.

  • (xii) Listing of debt financing instruments:

Matters in respect of listing application shall be determined in accordance with the actual situation of the Company, market condition and relevant laws and regulations.

  • (xiii) Validity period of the resolution:

Effective within 48 months from the date on which the resolution in respect of the issuance of Onshore and Offshore Debt Financing Instruments being approved at the EGM.

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LETTER FROM THE BOARD

Shareholders’ Authorization

In order to expedite the issuance of the Onshore and Offshore Debt Financing Instruments, it is proposed at the EGM to authorize the Board and agree the Board in turn to authorize the chairman and the president of the Company to jointly determine, on the principle to maximize the benefits of the Company, the specific size, proposal, time, method and other matters with respect to such issuance in accordance with related laws and regulations, opinions and suggestions of regulatory authorities, capital requirement of the Company and the then prevailing market condition, and oversee the issue and repayment status of the Onshore and Offshore Debt Financing Instruments. Such authorization includes but not limited to the following:

  • i According to applicable laws, regulations and related requirements of regulatory authorities and resolutions of the EGM, to formulate and adjust specific proposals for the issuance of other onshore and offshore debt financing instruments (including but not limited to the determination of the appropriate issuer, types, size, term, method to determine interest rate, provisions, targets and time (such as one-off issue, issue in multiple occasions and issue in tranches and in multiple types, and the size and term of each issue, tranche and type) thereof), security arrangements, credit enhancement arrangements such as letters of guarantee and letters of support and credit rating arrangement, specific use of proceeds, whether and how to set up terms of re-sale and redemption, option to raise the interest rate, put option by investors, registration, listing and place of listing, repayment and interest payment, measures to lower repayment risks, measures to safeguard repayment and all other matters in relation to such issuance of the Onshore and Offshore Debt Financing Instruments in accordance with condition of the Company and related debt markets;

  • ii To determine on the engagement of intermediaries, to execute, exercise, revise and conclude all agreements and documents in relation to the Onshore and Offshore Debt Financing Instruments issuance (including but not limited to credit enhancement agreements such as sponsorship agreements, underwriting agreements, guarantee agreements and letters of support, bond indentures, engagement agreements of intermediaries, entrusted management agreements, settlement management agreements, registration and custody agreements, listing agreements and other legal documents) and to make relevant disclosure in accordance with relevant laws and regulations and listing rules of stock exchanges on which securities of the Company are listed (including but not limited to preliminary and final memorandum of the issuance of the Onshore and Offshore Debt Financing Instruments, announcements and circulars in relation to the issuance of other onshore and offshore debt financing instruments of the Company, etc.);

  • iii To appoint the entrusted manager and settlement manager for the Onshore and Offshore Debt Financing Instruments issuance, to execute any entrusted management agreements and settlement management agreements in relation thereto and to formulate procedures for meeting of such instruments, if applicable;

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LETTER FROM THE BOARD

  • iv To conduct all reporting and listing in relation to such issuance of the Onshore and Offshore Debt Financing Instruments, if applicable, including but not limited to preparation, modification and delivery of reporting materials of the Onshore and Offshore Debt Financing Instruments issuance, listing, credit enhancement agreements such as guarantees and letters of support provided by the issuer and/or any third parties, and to execute related reporting documents and other legal documents in accordance with requirements of regulatory authorities and industry self-discipline organizations;

  • v To make corresponding adjustment to the Onshore and Offshore Debt Financing Instruments issuance according to opinions of regulatory authorities, changes of policy and changes in market condition or to determine whether proceed with all or part of the work in relation to other onshore and offshore debt financing instruments of the Company, save for matters subject to the reapproval of the general meeting required under related laws and regulations and the Articles of Association; and

  • vi To carry out all other matters related to the issuance, listing and other matters of the Onshore and Offshore Debt Financing Instruments;

The above authorization shall be valid within 48 months from the date of passing of such resolution at the EGM. However, if the Board and/or its delegations have determined the issuance or part of the issuance of the Onshore and Offshore Debt Financing Instruments during the validity period of such authorization and the Company has also obtained approval, permit, filing or registration (if applicable) thereof from regulatory authorities during the validity period of such authorization, the Company may complete such issuance or part issuance during the validity period of confirming such approval, filing or registration, and, for the purposes of such issuance or part of the issuance related, the validity period of such authorization shall be extended to the date on which the issuance or part of the issuance completes.

Given that the issuance of the Onshore and Offshore Debt Financing Instruments is subject to approval at the EGM and by related government departments or regulatory authorities in the PRC, Shareholders and investors are advised to exercise caution when dealing in the Shares and other securities of the Company.

(5) GENERAL INFORMATION

The EGM will be convened by the Company to seek approval from the Shareholders for, inter alia, (i) appointment of the proposed Directors and Supervisors; (ii) proposed allowance of independent Supervisors; (iii) proposed amendments to the Articles of Association and the Rules of Procedures for the Supervisory Committee; and (iv) general mandate to issue Onshore and Offshore Debt Financing Instruments. Please be reminded that, other than approval from the Shareholders, the appointment of the proposed Directors and Supervisors, proposed amendments to the Articles of Association and the proposed issuance of the Onshore and Offshore Debt Financing Instruments are still subject to approval from the relevant governmental authorities of the PRC.

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LETTER FROM THE BOARD

EGM

The EGM of the Company will be held at 9:00 a.m. on Thursday, 10 September 2015 at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC, and the notice of EGM is set out on pages 26 to 33 of this circular.

No Shareholder is required to abstain from voting in connection with the matters to be resolved at the EGM.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM in person, you are requested to complete and return the accompanying applicable form of proxy in accordance with the instructions printed thereon as soon as possible to the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (in case of holders of H Shares) and to the head office of the Company in the PRC (in case of holders of Domestic Shares) as soon as possible, but in any event, no later than 24 hours before the time appointed for holding the EGM (or any adjournment thereof). Completion and delivery of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment if you so wish.

Voting

According to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. Therefore, the resolutions as set out in the notice of EGM will be taken by way of a poll under the Article 116 of the Articles of Association.

During the poll, every Shareholder present in person or by proxy (or in case of corporation, its duly authorised representative) at the EGM shall have one vote for each Share registered in his/her name in the register of members. A Shareholder entitled to more than one vote needs not use all his/her votes or cast all the votes he/she uses in the same manner.

RECOMMENDATION

The Board considered that all resolutions to be proposed at the EGM are in the interests of the Company and the Shareholders as a whole. Therefore, the Board recommends the Shareholders to vote in favour of all the resolutions to be proposed at the EGM.

Yours faithfully, On behalf of the Board

Central China Securities Co., Ltd. JIAN Mingjun

Chairman

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APPENDIX

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND THE RULES OF PROCEDURES FOR THE SUPERVISORY COMMITTEE

Proposed amendments to the Articles of Association are set out below:

Article 113

Existing Article 113:

“List of Director and supervisor candidates shall be provided by way of proposals at the general meeting.

The Board shall provide the shareholders with resumes and basic information of Director and supervisor candidates.

The Director candidates shall be nominated by the previous section of the Board, or the shareholders individually or jointly holding no less than 3% of the total of the Company’s shares. The nomination methods and procedures of independent Directors shall be performed in accordance with the laws, regulations, relevant provisions of the securities regulatory authorities of the place where the Company’s shares are listed and relevant rules in relation to independent Directors.

The shareholder representative supervisor candidates shall be nominated by the previous section of supervisory committee, or the shareholders individually or jointly holding no less than 3% of the Company’s shares. Employees representative supervisor candidates shall be democratically elected by employees of the Company.

If the number of Directors nominated by any shareholder of the Company accounts for no less than one half of the total members of the Board, then the number of shareholder representative supervisors nominated by such shareholder shall not exceed one third of the total members of the supervisory committee.”

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APPENDIX

Amended Article 113:

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND THE RULES OF PROCEDURES FOR THE SUPERVISORY COMMITTEE

“List of Director and supervisor candidates shall be provided by way of proposals at the general meeting.

The Board shall provide the shareholders with resumes and basic information of Director and supervisor candidates.

The Director candidates shall be nominated by the previous section of the Board, or the shareholders individually or jointly holding no less than 3% of the total of the Company’s shares. The nomination methods and procedures of independent Directors shall be performed in accordance with the laws, regulations, relevant provisions of the securities regulatory authorities of the place where the Company’s shares are listed and relevant rules in relation to independent Directors.

The non-employee representative supervisor candidates shall be nominated by the previous section of supervisory committee, or the shareholders individually or jointly holding no less than 3% of the Company’s shares. Employee representative supervisor candidates shall be democratically elected by employees of the Company.

If the number of Directors nominated by any shareholder of the Company accounts for no less than one half of the total members of the Board, then the number of shareholder representative supervisors nominated by such shareholder shall not exceed one third of the total members of the supervisory committee.”

Article 208

Existing Article 208:

Amended Article 208:

“The positions of supervisors shall be assumed by shareholder representatives and employee representatives.”

“The positions of supervisors shall be assumed by shareholder representatives, employee representatives, external supervisors and independent supervisors.”

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APPENDIX

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND THE RULES OF PROCEDURES FOR THE SUPERVISORY COMMITTEE

Article 212

  • Existing Article 212:

  • Amended Article 212:

“The term of office of a supervisor shall be three years. Shareholder representative supervisors shall be elected or replaced at the general meetings, employee representative supervisors shall be elected or removed democratically by employees of the Company at employee representatives’ meetings, employees’ meetings or in other forms. Supervisors may serve consecutively upon re-election.”

“The term of office of a supervisor shall be three years. Non-employee representative supervisors shall be elected or replaced at the general meetings, employee representative supervisors shall be elected or removed democratically by employees of the Company at employee representatives’ meetings, employees’ meetings or in other forms. Supervisors may serve consecutively upon re-election.”

Article 223

  • Existing Article 223:

“The Company shall have a supervisory committee, consisting of six Supervisors, not less than one third of themselves of the supervisory committee shall be employee representative supervisors.

The supervisory committee shall have one chairman, who shall be appointed or removed by the affirmative votes of more than two thirds of the members of the supervisory committee.”

  • Amended Article 223:

“The Company shall have a supervisory committee, consisting of nine Supervisors, not less than one third of themselves of the supervisory committee shall be employee representative supervisors.

The supervisory committee shall have one chairman, who shall be appointed or removed by the affirmative votes of more than two thirds of the members of the supervisory committee.”

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APPENDIX

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION AND THE RULES OF PROCEDURES FOR THE SUPERVISORY COMMITTEE

Proposed amendments to the Rules of Procedures for the Supervisory Committee are set out below:

Article 3

Existing Article 3:

“The supervisory committee consists of six supervisors, four of them are shareholder representative supervisors and two of them are employee representative supervisors. The shareholder representative supervisors are elected or replaced from the shareholders’ general meeting; employee representative supervisors are elected or replaced by the employee representatives assembly, the general employee meeting or other forms of democratic elections.

The directors, president and other senior management of the Company shall not act concurrently as supervisors.”

Amended Article 3:

“The supervisory committee consists of nine supervisors, six of them are non-employee representative supervisors and three of them are employee representative supervisors. The non-employee representative supervisors are elected or replaced from the shareholders’ general meeting; employee representative supervisors are elected or replaced by the employee representatives assembly, the general employee meeting or other forms of democratic elections.

The directors, president and other senior management of the Company shall not act concurrently as supervisors.”

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NOTICE OF EGM

Central China Securities Co., Ltd.

(a joint stock company incorporated in 2002 in Henan Province, the People’s Republic of China with limited liability under the Chinese corporate name “ ” and carrying on business in Hong Kong as “ ”) (Stock Code: 01375)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ EGM ”) of Central China Securities Co., Ltd. (the “ Company ”) will be held at 9:00 a.m. on 10 September 2015 (Thursday) at Conference Room, 17th Floor, Zhongyuan Guangfa Finance Building, No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC, for the purpose of considering and, if thought fit, passing the following resolution(s):

Unless otherwise indicated, capitalised terms used herein shall have the same meaning as those defined in the circular of the Company dated 27 July 2015 (the “ Circular ”).

AS ORDINARY RESOLUTIONS

“ THAT :

  1. To consider and approve the appointment of Mr. Jian Mingjun to be the Director of the Fifth Board for a term of three years;

  2. To consider and approve the appointment of Mr. Zhou Xiaoquan to be the Director of the Fifth Board for a term of three years;

  3. To consider and approve the appointment of Mr. Yuan Shunxing to be the Director of the Fifth Board for a term of three years;

  4. To consider and approve the appointment of Mr. Wang Lixin to be the Director of the Fifth Board for a term of three years;

  5. To consider and approve the appointment of Mr. Zhang Qiang to be the Director of the Fifth Board for a term of three years;

  6. To consider and approve the appointment of Mr. Zhang Xiaoqi to be the Director of the Fifth Board for a term of three years;

  7. To consider and approve the appointment of Mr. Yu Zeyang to be the Director of the Fifth Board for a term of three years;

  8. To consider and approve the appointment of Mr. Zhu Shanli to be the independent non-executive Director of the Fifth Board for a term of three years;

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NOTICE OF EGM

  1. To consider and approve the appointment of Mr. Yuan Dejun to be the independent non-executive Director of the Fifth Board for a term of three years;

  2. To consider and approve the appointment of Mr. Yuen Chi Wai to be the independent non-executive Director of the Fifth Board for a term of three years;

  3. To consider and approve the appointment of Mr. Ning Jincheng to be the independent non-executive Director of the Fifth Board for a term of three years;

  4. To consider and approve the appointment of Mr. Lu Zhili to be the Supervisor (non-employee representative Supervisor) of the Fifth Supervisory Committee for a term of three years;

  5. To consider and approve the appointment of Mr. Wang Jinchang to be the Supervisor (non-employee representative Supervisor) of the Fifth Supervisory Committee for a term of three years;

  6. To consider and approve the appointment of Mr. Yan Changkuan to be the Supervisor (non-employee representative Supervisor) of the Fifth Supervisory Committee for a term of three years;

  7. To consider and approve the appointment of Mr. Cui Yuanfeng to be the Supervisor (non-employee representative Supervisor) of the Fifth Supervisory Committee for a term of three years;

  8. To consider and approve the appointment of Ms. Xiang Siying to be the independent Supervisor (non-employee representative Supervisor) of the Fifth Supervisory Committee for a term of three years;

  9. To consider and approve the appointment of Ms. Li Jieying to be the independent Supervisor (non-employee representative Supervisor) of the Fifth Supervisory Committee for a term of three years;

  10. To consider and approve the proposed allowance of independent Supervisors; and

  11. To consider and approve the proposed amendments to the Rules of Procedures for the Supervisory Committee (details of which are set out in the Circular).

AS SPECIAL RESOLUTIONS

  1. The proposed amendment to the Articles of Association be approved and confirmed (details of which are set out in the Circular), and the Board be authorized to revise the wordings of such amendment as appropriate (no approval from the Shareholders is required for such revision), and execute relevant documents and/or take all relevant actions as it considers necessary or expedient and in the interest of the Company to effect the proposed amendments, to comply with the PRC laws and regulations and meet the requirements of the relevant regulatory authorities of the PRC (if any); and deal with other matters arising from the amendment to the Articles of Association.

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NOTICE OF EGM

  1. Subject to approval from related governmental departments or regulatory authorities of the PRC and compliance of the Administrative Measures for the Risk Control Indicators of Securities Companies in the PRC and the internal prudential risk indicators of the Company, to approve the issuance of various domestic debt financing instruments on an one-off or multiple issuances or multi-tranches issuances bases, either openly or privately, these debt financing instruments include, but not limited to, corporate bonds, short-term corporate bonds, subordinated bonds (including perpetual subordinated bonds), asset-backed securities (notes), income receipts and other domestic debt financing instruments to be issued by the Company as approved or filed with CSRC, Securities Association of China, stock exchanges and other relevant authorities in accordance with relevant regulation; and offshore debt financing instruments, on an one-off or multiple issuances or multi-tranches issuances bases, such as US dollar, Euro and other foreign currency denominated corporate bonds and offshore RMB-denominated corporate bonds, medium term note programme, foreign currency notes and commercial papers, except for debt financing instruments (such as short-term notes) which are subject to the approval of the Board or the general meeting in accordance with national regulations and policies of the Company. The Onshore and Offshore Debt Financing Instruments referred to in this resolution shall not contain any provision for conversion into shares.

  2. Subject to approval from related governmental departments or regulatory authorities of the PRC, to approve the proposal for the issuance of Onshore and Offshore Debt Financing Instruments as follows:

  3. (1) Size: The total size of the Onshore and Offshore Debt Financing Instruments shall not exceed 300% of the net asset value in the latest financial statements (inclusive of 300%, the size of issuance is calculated based on the outstanding amount denominated in RMB upon issuance; in the case of an instrument denominated in a foreign currency, based on the central parity rate announced by the People’s Bank of China on the date of each issuance or each tranche issuance), subject to relevant laws and regulations in respect of issuance limit, can be issued on an one-off or multiple issuances or multi-tranches issuances bases.

  4. (2) Types:

  5. The specific types and priorities for repayment of the Onshore and Offshore Debt Financing Instruments shall be determined according to relevant regulations and the market condition at the time of issuance.

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NOTICE OF EGM

  • (3) Terms:

The term of Onshore and Offshore Debt Financing Instruments shall not exceed 10 years (inclusive) with a single term or hybrid type with multiple terms.

  • (4) Interest rate:

  • The interest rate of the issuance and its method of calculation and payment method thereof shall be determined according to the market condition at the time of issuance and relevant regulations.

  • (5) Issue price:

  • The issue price shall be determined according to the market condition at each issuance and relevant laws and regulations.

  • (6) Security and other Security and other credit enhancement arrangements credit enhancement shall be determined according to relevant laws and arrangements: regulations.

  • (7) Use of proceeds: After deducting relevant expenses for the issuance, all of the proceeds will be used to supplement the working capital of the Company, fulfill the operation needs and support the business expansion, or used for the adjustment on liability structure of the Company, the supplement of the liquidity of the Company and project investment and/or construction of fixed assets according to laws.

  • (8) Issuer(s):

  • The Company or the domestic and overseas whollyowned subsidiary(ies) of the Company will serve as the issuer(s).

  • (9) Method of issuance: Shall be under custody and issue in accordance with the approval or filing of relevant authorities.

  • (10) Targets of issue and The targets of issue shall be investors which meet the the placement conditions for subscription in accordance with arrangements to the relevant laws and regulations. Placement to the Shareholders: Shareholders of the Company can be conducted in accordance with laws.

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NOTICE OF EGM

  • (11) Safeguard measures for debt repayment:

    • During the term of Onshore and Offshore Debt Financing Instruments, the Company can increase the proportion of allocations of discretionary surplus reserve and general risk reserve. When there is an anticipated or actual failure to repay the principal and interests of the Onshore and Offshore Debt Financing Instruments when they become due, at least the following measures shall be taken by the Company:

    • (1) not to distribute dividend to the Shareholders;

    • (2) to suspend implementation of any capital expenditure projects such as material external investments, acquisitions and mergers, etc.;

    • (3) to reduce or cease the payment of salary and bonus of the Directors and senior management of the Company;

    • (4) to forbid the job transfers of principal persons in charge.

  • (12) Listing of debt Matters in respect of listing application shall be financing instruments: determined in accordance with the actual situation of the Company, market condition and relevant laws and regulations.

  • (13) Validity period of the Effective within 48 months from the date on which resolution: the resolution in respect of the issuance of Onshore and Offshore Debt Financing Instruments being approved at the EGM.

  • To authorize the Board and agree the Board in turn authorize the chairman and the president of the Company, to jointly determine, on the principle to maximize the benefits of the Company, the specific size, proposal, time, method and other matters with respect to the issuance of the Onshore and Offshore Debt Financing Instruments in accordance with related laws and regulations, opinions and suggestions of regulatory authorities, capital requirement of the Company and the then prevailing market condition, and oversee the issue and repayment status of the Onshore and Offshore Debt Financing Instruments. Such authorization includes but not limited to the following:

  • (1) Subject to applicable laws, regulations and related requirements of regulatory authorities and resolutions of the EGM, to formulate and adjust specific proposals for the issuance of other onshore and offshore debt financing

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NOTICE OF EGM

instruments (including but not limited to the determination of the appropriate issuer, types, size, term, method to determine interest rate, provisions, targets and time (such as one-off issue, issue in multiple occasions and issue in tranches and in multiple types, and the size and term of each issue, tranche and type) thereof), security arrangements, credit enhancement arrangements such as letters of guarantee and letters of support and credit rating arrangement, specific use of proceeds, whether and how to set up terms of re-sale and redemption, option to raise the interest rate, put option by investors, registration, listing and place of listing, repayment and interest payment, measures to lower repayment risks, measures to safeguard repayment and all other matters in relation to such issuance of the Onshore and Offshore Debt Financing Instruments in accordance with condition of the Company and related debt markets;

  • (2) To determine on the engagement of intermediaries, to execute, exercise, revise and conclude all agreements and documents in relation to the Onshore and Offshore Debt Financing Instruments issuance (including but not limited to credit enhancement agreements such as sponsorship agreements, underwriting agreements, guarantee agreements and letters of support, bond indentures, engagement agreements of intermediaries, entrusted management agreements, settlement management agreements, registration and custody agreements, listing agreements and other legal documents) and to make relevant disclosure in accordance with relevant laws and regulations and listing rules of stock exchanges on which securities of the Company are listed (including but not limited to preliminary and final memorandum of the issuance of the Onshore and Offshore Debt Financing Instruments, announcements and circulars in relation to the issuance of other onshore and offshore debt financing instruments of the Company, etc.);

  • (3) To appoint the entrusted manager and settlement manager for the Onshore and Offshore Debt Financing Instruments issuance, to execute any entrusted management agreements and settlement agreements in relation thereto and to formulate procedures for meeting of such instruments, if applicable;

  • (4) To conduct all reporting and listing in relation to such issuance of the Onshore and Offshore Debt Financing Instruments, if applicable, including but not limited to preparation, modification and delivery of reporting materials of the Onshore and Offshore Debt Financing Instruments issuance, listing, credit enhancement agreements such as guarantees and letters of support provided by the Company, the issuer and/or any third parties, and to execute related reporting documents and other legal documents in accordance with requirements of regulatory authorities and industry self-discipline organizations;

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NOTICE OF EGM

  • (5) To make corresponding adjustment to the Onshore and Offshore Debt Financing Instruments issuance according to opinions of regulatory authorities, changes of policy and changes in market condition or to determine whether proceed with all or part of the work in relation to other onshore and offshore debt financing instruments of the Company, save for matters subject to the reapproval of the general meeting required under related laws and regulations and the Articles of Association; and

  • (6) To carry out all other matters related to the issuance, listing and other matters of the Onshore and Offshore Debt Financing Instruments.

The above authorization shall be valid within 48 months from the date of passing of such resolution at the EGM. However, if the Board and/or its delegations have determined the issuance or part of the issuance of the Onshore and Offshore Debt Financing Instruments during the validity period of such authorization and the Company has also obtained approval, permit, filing or registration (if applicable) thereof from regulatory authorities during the validity period of such authorization, the Company may complete such issuance or part issuance during the validity period of confirming such approval, filing or registration, and, for the purposes of such issuance or part of the issuance related, the validity period of such authorization shall be extended to the date on which the issuance or part of the issuance completes.

Central China Securities Co., Ltd. JIAN Mingjun Chairman

Henan, the PRC 27 July 2015

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NOTICE OF EGM

Notes:

  1. The register of members of the Company will be closed from 11 August 2015 to 10 September 2015 (both days inclusive), during which period no transfer of shares of the Company can be registered. In order to qualify to attend and vote at the EGM, all transfer documents accompanied by the relevant share certificates must be lodged with the H share registrar of the Company, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for holders of H shares of the Company) or the head office in the PRC of the Company (for holders of domestic shares of the Company), no later than 4:30 p.m. on 10 August 2015.

  2. Shareholders who are entitled to attend and vote at the EGM may appoint one or more proxies to attend and vote on their behalves. A proxy need not be a Shareholder of the Company.

  3. In order to be valid, the proxy form for the EGM must be deposited by hand or post, for holders of H shares of the Company, to the H share registrar of the Company, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong and, for holders of domestic shares of the Company, to the head office in the PRC of the Company not less than 24 hours before the time for holding the EGM (or any adjournment thereof) for taking the poll. If the proxy form is signed by a person under a power of attorney or other authority, a notarial copy of that power of attorney or authority shall be deposited at the same time as mentioned in the proxy form. Completion and return of the proxy form will not preclude shareholders from attending and voting in person at the EGM or any adjourned meetings should they so wish.

  4. Shareholders or their proxies shall provide their identity documents when attending the EGM.

  5. Shareholders who intend to attend the EGM should complete the reply slip and return it by hand or by post to the H share registrar of the Company (for holders of H shares of the Company) or to the head office in the PRC of the Company (for holders of domestic shares of the Company) on or before 20 August 2015.

  6. The EGM is expected to take two hours approximately. Shareholders attending the EGM shall be responsible for their own travel and accommodation expenses.

  7. The address of the head office in the PRC of the Company is No. 10 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, the PRC.

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